KPMG Personalization

Notice of updates
!

Since the last time you logged in our privacy statement has been updated. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. You will not continue to receive KPMG subscriptions until you accept the changes.

Hi
!

Our privacy policy has been updated since the last time you logged in

We want to make sure you're kept up to date. Please take a moment to review these changes. You will not receive KPMG subscription messages until you agree to the new policy.

Highlights

Related content

New technologies are creating massive opportunities for consumers, governments and infrastructure owners. But they are also creating risks and new challenges.

There are a few technologies as emblematic of the transformative change undergoing infrastructure as the automobile. For the past 100 years, cars have defined the way we plan and build our cities. And now, as the auto industry moves towards electrification and automation, cars are - once again - disrupting the status quo.

Anticipating autonomy

Depending on who you ask, most pundits think that fully autonomous vehicles will be `on the road' within the next decade. The automotive sector is certainly pulling out all the stops to make autonomous cars a reality. So, too, are big name startups and tech companies like Tesla, Google and Uber.

Many governments are also keen to help advance the introduction of autonomous cars. The US States of Michigan and Florida already allow autonomous vehicles to operate on their streets. And in Europe, the UK, France, Belgium, Germany, Spain and the Netherlands have allowed driverless cars to be tested in real life situations.

The benefits of autonomous vehicles are fairly clear. “For us, it's really about making our roads safer. Last year, there were more than 1,000 fatalities on Michigan roadways due to traffic crashes,” notes Kirk Steudle, the Director of the Michigan Department of Transportation. “Current estimates suggest that autonomous vehicles could reduce that number by 80 percent. That's 800 lives that could have been saved in our State last year alone.”

Setting the stage for adoption

While the technology behind vehicle autonomy is moving ahead at break-neck speed, it may be some time before our infrastructure is ready for the massive changes that vehicle autonomy will bring. Getting regulators and consumers ready for the change may take even longer.

According to Mr. Steudle, the autonomous vehicle industry will still need to overcome some pretty big challenges before driverless cars become commonplace. “It's going to take some time before automotive companies are comfortable enough with their systems to assume the liability for what their vehicles do on the roadway,” he notes from his office in Detroit.

Many of the autonomous technologies now in development will require authorities to improve their infrastructure. Road lines will need to be repainted and widened. Road surfaces will need to be improved. Traffic signaling will need to be updated. Road signs will need digitization. “These are things public road agencies should be considering as they make their current investments,” suggests Mr. Steudle.

Understanding the risks

Yet as the technology evolves, things may become more complicated. To enable `platooning' (where autonomous cars move together in a convoy) and reduce crashes, new vehicle-to-vehicle and vehicle-to-infrastructure communications protocols will need to be developed and tested.

According to Peter Kestner, a Partner in KPMG's Cyber Security practice based in Germany, this could take some time. “The industry is now starting to think about how the technologies will work together. What protocols will be required? What bandwidth will be used? How large should the radius be? These are all questions that will need to be answered,” he noted.

More challenging, perhaps, will be developing the `ethical code' by which driverless cars will operate. “If an accident is inevitable, should the car be able to choose who to hit? Will it be able to decide between the family of five or the single driver in the pickup truck? These are moral and ethical decisions that will need to be built into the algorithms, but I don't think anyone has a clear view of the right answer at the moment,” he added.

Regulating public safety

One of the biggest concerns for regulators, automakers and drivers will be around cyber security. Indeed, as cars become increasingly connected to each other and integrated into the surrounding infrastructure, the risk of a malicious cyber hack will increase. The military, in particular, is concerned that cars could be hijacked by terrorists to cause significant damage.

“Right now, everyone is racing to develop the enabling technology that will allow vehicles to move autonomously but, unfortunately, security is often an after-thought,” he says. “The reality is that security needs to be embedded right from the beginning of the design process. One major attack on the system could put adoption back by a decade.”

While much of the responsibly for security will fall on the automakers and their suppliers, both Mr. Steudle and Mr. Kestner believe that government has a significant role to play in encouraging security and standards.

“In the U.S, the National Highway Traffic Safety Administration has a long history of regulating automobile safety standards and, in my opinion, that's where the regulatory authority needs to stay,” notes Mr. Steudle. “There isn't a State employee anywhere in the country that fully understands what is happening inside the vehicle.”

Mr. Kestner suggests that while car manufacturers will need to review their products and suppliers' products to ensure they meet a minimum security requirement, regulators will also need to play a role in defining security protocols. “When it comes to the movement of people, regulators will need to play a role in setting that base security requirement,” he notes. “But they need to start moving now. They can't sit back and wait for problems to happen before they act.”

Finding common ground

However, both Mr. Steudle and Mr. Kestner agree that the best way to encourage adoption and remove risks is for automakers, technology companies, governments and regulators to work together on a common solution.

“I think we all recognize that the shift to autonomous vehicles will require everyone to work together to bring this forward in a safe and effective manner,” suggests Mr. Steudle. “The issues are too big and too complicated to leave to just one party or company.”

Mr. Kestner agrees. “There is so much we can learn from each other and from other industries,” he adds. “The most important thing anyone can do is encourage collaboration - on security, on standards and on technologies. If we keep working in silos and in competition, I worry that we're going to be in real trouble down the road.”